(Bloomberg) — Allies of Italian Prime Minister Giuseppe Conte are raising the specter of early elections in a bid to win over lawmakers as the premier struggles to patch together backing for his minority government.
Conte, who lost a key ally in parliament last week, is having a tougher-than-expected time rebuilding his majority, and his camp is trying to win over lawmakers by using the threat of snap elections, even though this is widely considered an unlikely option, according to officials who asked not to be named discussing confidential talks.
The 56-year-old Conte, who has no party of his own and was plucked from obscurity to become premier in 2018, does see elections as a possibility, buoyed by opinion polls that suggest he could win 15% or more of the vote, according to an official familiar with his thinking.
Daily Corriere della Sera reported earlier on Friday that the premier Conte is tempted by early elections, citing his poll numbers and comments from unnamed sources.
But Conte’s allies within the coalition are saying privately they’ll refuse to follow him down that path, and if he persists he could end up returning to his past career as a professor of law, the official said.
Italian bonds fell Friday, putting 10-year yields on course for a weekly rise of 12 basis points to 0.74%, their biggest jump since April. The premium over German bonds, a key gauge of risk in the region was at 124 basis points, the highest level since November.
Lawmakers have cited the pandemic, an economy in recession and the need to manage the European Union’s recovery package as reasons to avoid going to the polls in the near future.
Coalition members also fear that a vote would usher in the center-right opposition led by Matteo Salvini, and in any new vote many would lose their seats since the parliament has been downsized following reforms, lawmakers said, asking not to be named discussing confidential deliberations.
Conte, who won confidence votes in both houses of parliament earlier this week but fell short of an outright majority in the Senate, is targeting senators from Silvio Berlusconi’s Forza Italia, centrists, unaffiliated lawmakers and even members of Matteo Renzi’s Italy Alive party, which ditched the coalition last week.
Officials in the two main coalition forces, the Five Star Movement and the center-left Democratic Party, are seeking to persuade lawmakers that refusing to back Conte now would lead to early elections. But senators being targeted by the Conte camp have yet to publicly announce their support, amid reports of haggling over favors including government jobs.
President Sergio Mattarella, who would oversee any attempt to form a new government, has pressured Conte to resolve the impasse quickly and ensure a stable majority. Possible scenarios if the prime minister fails in his quest include a new Conte government, a similar alliance under a different premier, or a broader coalition.
New elections would delay crucial reforms for the country and timely access to the EU’s package, and add to investors’ uncertainty over some government-backed deals including the sale of lender Monte Paschi di Siena SpA, according to two people familiar with the matter.